Friday, August 21, 2009

The Bush Dynasty and the bin Ladens

The Bushes of AmericaBy Paul Goldsmith The East AfricanAugust 17 2009

STEVE COLL, AUTHOR OF THE BIN LADENS (SEE The EastAfrican, August 3-9), and Kevin Phillips develop overlapping perspectives of the post World War II economic history of oil and internal politics in Saudi Arabia and the United States. They use the optic of wealthy politically connected families to do this.

Coll follows the progress of the Bin Ladens while constantly updating the varied social and political contexts. Important star and supporting actors feature in both books.

Phillips had more data and published material to draw upon, and the scope of his book reinforces the parallels with Coll’s Bin Laden family account. But where Coll’s vastly entertaining account unfolds like an epic movie, Phillips’ is a long-running documentary.

The story of the Bush dynasty begins at the turn-of-the-century in the American Midwest. The dynasty’s progenitors, Samuel Bush and George Herbert Walker, were very rich. Bush owned Buckeye Steel Casings, which specialised in manufacturing the coupling linking railway cars. Walker was the owner of the largest dry goods store west of the Mississippi.

Railways were the arteries of the young nation’s surging commerce and industry and Samuel Bush was a primary supplier. He became director of several regional lines and the Federal Reserve Bank of Cleveland.

Walker used his links to Midwestern industry to become an advisor to J.P Morgan & Co, banker E.H Harriman (father of the future presidential candidate Averell) and St Louis businessman Robert Brookings, founder of the conservative Washington think tank, the Brookings Institute.

The nation’s late entry into the First World War spurred industrial production. Buckeye manufactured shell casings; Sam Bush made profits. Walker (something of a pirate in business) made a killing — brokering some $3.2 million worth of government military purchases, a figure four times the US budget in 1914. He ended up as director of 17 different corporations.

Awash with capital, their wartime roles enabled both families to establish a foothold on the country’s east coast elite. Walker built a summerhouse (Walker’s Point) in Kennebunkport, Maine. The Bush children were regular visitors.

The sons of these midwestern tycoons attended the prestigious New England boarding schools. George Herbert Walker Jr. went to Harvard, Samuel’s son Prescott to Yale; George joined Harvard’s Porcellian Club, Prescott was admitted into Yale’s Skull and Crossbones. Membership to these secret societies cemented their position in the WASP old boy networks, and initiated them into a culture of secrecy that served them well.

THE FOUNDATIONS OF THE dynasty were laid when Prescott Bush married Walker’s favourite daughter, Dorothy, in 1919. Walker subsequently became like a second father to Prescott; this was the template for the relationship between George Herbert Walker Jr. and Prescott’s son, George H.W Bush. Prescott became a senior figure in the Walker family’s investment bank, Brown Brothers Harriman.

Their subordinate role appeared to be a driver to Bush’s ambitions. Phillips observes, “Having to acknowledge and accept the influence of money of two Walker generations cannot have been easy for Samuel Bush and Prescott Bush.”

Elected to the Senate in 1952, Prescott Bush nursed presidential ambitions. But his membership to the same northeastern establishment that forced Joseph Kennedy to transfer his presidential aspirations to his son was an obstacle. The family’s contribution to Nazi Germany was another: Brown Brothers Harriman’s investments helped finance the recovery of industrial interests vital to Hitler’s military build-up.

Bush was also a director of Dillon Read, a firm that financed the company producing 40 per cent of Nazi Germany’s sheet metal. As late as 1938, Prescott Bush’s Wall Street firm participated in a transaction providing the lead used to build the Luftwaffe’s planes.

If Prescott Bush, according to his biographer, “believed in principles, but left no visible footprints, behind the scenes he and his colleagues made an important contribution to the war machine.”

These politically controversial investors were not alone. As board members of International Nickel, John Foster Dulles and his brother Allen helped work out a pre-war agreement with IG. Farmen that provided Germany with the materials used to make armour plating.

DURING HIS TENURE AS ambassador to St James Court, Kennedy senior’s strong support for the “hardworking and progressive Nazis” became a liability, forcing the State Department to use backchannel communications with the British government.

The significant segment of the Wall St industrial elite that continued to support Hitler even after 1939 became a major political headache for President Franklin Delano Roosevelt.

When Hitler invaded Great Britain they continued to vocalise the view that the conquest of Europe would satisfy Germany, and the Nazis would agree to a Peace Treaty with the US consolidating their gains.

The association between war, capital, and political self-interest is amazing and ironic; a recurring theme of Phillip’s analysis.

Joseph Kennedy’s support for the Nazis is common knowledge, and Neville Chamberlain is branded forever as the Prime Minister who appeased Hitler, but the popular accounts of the war airbrush the extent of the Walker-Bush old boy network’s Nazi linkages.

It is ironic because once the US entered the war after the Battle of Britain, many of the same industrialists, investors, and lawyers became the primary beneficiaries.

The east coast elite went on to dominate the class of professionals who developed international perspectives via their position in bodies like the War Production Board, War Industries Board, Council of National Defence and the Allied Maritime Transport Council.

The World Wars provided the bridge that Wall St bankers and the east coast elite in isolationist America used to span the gap with the international economy.

As Phillips notes, “These various embroilments, despite their potential for scandal, were regarded as unfortunate but, in essence, business as usual. They were also spun for their value as intelligence... many men with these particular involvements, or their family members, went on to become pillars of the US national security and intelligence establishments after World War II.

“A number of their descendants turned up as advisors and appointments in the George H. Bush government.”

The influence of this private sector-state network is the book’s primary thread, and Phillips documents their role in intelligence, the energy sector, armaments and overseas connections. Nation and world have endured multiple reiterations of “Roosevelt’s headache” as a consequence.

Phillips is a traditional Republican and author of the influential 1969 book, The Emerging Republican Majority, which predicted the rise of the “sunbelt” in politics.

He is upset with how a club of elitist and secretive insiders within the party has subverted the values of the GOP. His own Washington career no doubt equipped him with reams of colourful material on the individuals featured in the book, but he eschews anecdotal asides and personal vignettes.

Rather, the history of insider influence, manipulation, secrecy, deceit, and the ugly innards of familiar events that Phillips reveals are meant to support his dynasty thesis: The progress achieved by liberal polities and enlightened republics is vulnerable to backsliding, reversions to the old order engineered by its elites and aristocrats.

PHILLIPS PERIODICALLY returns to comparisons between the election of George W. Bush and the restoration of the Stuarts in England and the Bourbons in France to debunk the notion of America’s democratic exceptionalism. By page 300, the Bush presidents have become George I and George II.

There are no references to historical materialism in the glossaries of the two books — but the dialectical progression to their shared raison d’etre unfolds clearly enough.

Both stories invariably validate principles of Marxist political economy; and both accounts effectively validate John Cassidy’s oft-quoted 1997 New Yorker article that reviewed the state of the global economy a century after his death and concluded, “Marx got it 95 per cent right.”

A five per cent discrepancy is small, but not insignificant. It is instructive to remember that a yet smaller variance in the genome shared by chimps and humans accounts for their distinctive evolutionary trajectories. The reproduction of the Bush and Bin Laden families’ kinship-based capitalism led to unexpected outcomes that help fill Cassidy’s gap.

The role of Samuel Bush and sons in four American wars is a consistent motif linking the chapters on investment banking, Texas culture and politics, oil and the military-industrial complex, Wall Street-foreign policy linkages and the emergent CIA-security state.

The growing political influence the Bush family represents induces the author to cite Eisenhower’s cautionary warnings about the military-industrial complex and the dangers it poses to American democracy.

Two world wars underscored that oil is the cornerstone of national defence. Insufficient supply of oil hobbled the Nazi war machine; access to Middle Eastern sources was a major comparative advantage for the Allies. Hence Roosevelt’s 1943 “FDR declaration” — “I hereby find the defence of Saudi Arabia is vital to the defence of the United States.”

New opportunities in the international energy sector beckoned. After the war, two Walker-owned companies became the main redevelopers of the Baku oil fields in the Soviet Caucasus. Like Walker, Prescott Bush and sons’ oil wealth did not derive from the commodity itself, but rather through investing in offshore interests.

George H. Bush’s Texas-based companies, Zapata Petroleum and Zapata Offshore, established during the 1950s, operated in the complex domain of offshore investment and tax shelters.

Domestic oil fortunes had remained the province of old eastern families until the 1973 embargo propelled a clutch of Texan oil tycoons into the club.

GEORGE H. WAS IN THE RIGHT place His third generation status within the Wall St banking gentry — and the intelligence — came into play after the American government encouraged oil sheikhs to reinvest their surplus petrodollars in the US as a compensatory policy.

This issue — not oil proper, but the financial interests it generates — marks the intersection of the destinies of the Bin Laden and the Bush families. The secretive transactions and insider connections George H. forged during this phase provided the base for his ambitions: Ambassador to China, CIA director, Senator, Reagan’s vice president, Oval Office.

Salim bin Laden’s career as an agent of the royals and other Saudi investors began around the same time, and this was to bring the bin Ladens into the Bush orbit. The two empire builders shared a proclivity for practical joking.

Like his father, George H. was a lifetime preppy with a penchant for pranks. He raided the grave of Apache chief Geronimo, stole his skull and delivered it to the Skull and Crossbones vault at Yale.

During his tenure as ambassador to China, he subjected state waiters to the $20 bill on a string prank. After becoming president, he kept a voice-activated stuffed monkey at the White House who socked himself in the head when the Commander-in-Chief began to talk.

Phillips’s narrative unmasks the serious business and political activism motivating the sons of Prescott Bush in the covert proxy war in Afghanistan and the two Iraqi invasions. In Afghanistan, Reagan’s “Evil Empire” furnished the casus belli; the Great Game waged by Imperial Britain in the same region provided the operational model. CIA funding for the Afghan Mujahideen went from $30 million in 1984 to $634 million in 1987.

For the Agency’s cold warriors, this new Great Game was Kiplingesque adventure; two important operatives in the field even used Kim in their handles. In reality, their great game was more like the Marx Brothers film, Duck Soup.

The Soviet withdrawal concealed their naiveté and sheer incompetence; Mujahideen victory shaded the hubris of their domestic masters — at least for the time being; the Taliban-Al Qaeda problem was lurking in the wings.

No matter, everyone likes a winner. Washington’s conservative establishment revelled in the impending collapse of communism as the 1980s drew to a close. In July 1989, George H. Bush faced off with the gigantic bust of Marx overlooking the auditorium of Budapest’s Karl Marx University and declared, “History does not unfold according to a set of mechanical laws, but is a creative and uniquely human process.”

Salim bin Laden used his travelling road show to open doors. The creativity practised by the Bush dynasties, in contrast, was literally Machiavellian.

Bush senior’s campaign manager, Lee Atwater, reread Machiavelli every year — his disciple Karl Rove perfected the art of cloaking the princely family fortune built on family connections, cronyism, paper entrepreneurialism, tax shelters, and government influence.

BOTH SPIN-DOCTORS WERE adept at using themes like “kindler, gentler politics” and “compassionate conservatism” to market their candidates to the public and to sweep the contradictions under the rug.

The homespun Texas populism they manufactured led one academic to coin the term Mayberry Machiavellianism (after a popular sit-com about a small town sheriff and his bumbling deputy).

Phillips tells us the civic culture in Texas has more in common with Venezuela, Mexico, and Brazil than with the other states in the Union. He reels off statistics showing the Lone Star State’s dismal income distribution, rock-bottom education system, and miserly spending on social services.

Phillips updates the tradition of deceit by tracing the sordid details of the Enron debacle, the BCCI scandal, Halliburton’s special dispensation, and the policies allowing private military contractors to reap massive profit margins. Contradictions galore, but such details are overshadowed by the tradition of kick-ass bravado reflected in three Texan presidents’ penchant for going to war.

George I, however, is the biggest contradiction of them all.

After engineering massive growth of the military and intel sectors on the way up, and after all the deal-making with Royal Saudi clans, the president vacillates when Saddam invades Kuwait. “We don’t like to involve ourselves in Arab countries’ border issues,” is the initial response. This stance changes after Margaret Thatcher confides in him, “The Falklands gave me eight good years.”

The publicity machine is geared up to spew out Saddam-Hitler comparisons — the Bushes should know, both are old family friends — and trump up tales of 312 Kuwaiti babies being ripped out of incubators. A line is drawn in the sand, the “turkey shoot” affair sees F-16s strafe Iraqis fleeing towards Basra, Texas Ranger George Herbert Walker Bush still manages to incite a Shia uprising — then pulls out.

Saddam Hussein sorted out, it’s business as usual at home. The Energy Act of 1992 deregulates the electricity market. Bush fails to win re-election later that year, but before leaving office the Commodities Futures Trading Commission exempts energy derivative contracts and interest rate swaps from federal regulation. The CFTC, chaired by the wife of Republican Senator from Texas, Phil Gramm, truncates the formal process required to review such complex issues.

MRS GRAMM RESIGNS from the CFTC a week later, and resurfaces as an Enron board member the next month. The Skull and Crossbones gang helps Enron get projects in 31 countries. Manipulation of energy futures sends prices spiralling 50-fold. The lights go out in California and the Midwest. Foreign ventures go awry.

After a series of technical cock-ups and human-rights abuses, India pulls the plug on Enron’s $300m contract for the Dubhol power plant. It all begins to unravel. Documents are shipped abroad when a Swiss bank swaps unpaid loans for the subsidiary, Enron Online. More are safe in the Cayman Islands, federal investigators dally on the way to Enron HQ, other records are shredded.

This is mind-numbing stuff. But as Marx once said, “Those who use the simplistic term, the economy, are themselves stupid.” The linchpin of Phillips’ dynasty argument is the election of Bush II.

George Walker Bush did not inherit his father and grandfather’s athleticism and class-inculcated sense of propriety. He did not exactly fit in at Yale, and drifted after graduation.

He partied and his father had to use his network to cover up and expunge a rumoured arrest for cocaine possession. When his community service became public knowledge, it was glossed as a sentence for driving while inebriated.

This low point prompted George W to seek religion. His conversion, which coincided with a string of failures in the oil sector, laid the foundation for “one of the most extraordinary role changes by a major political family in the country’s history.”

According to Phillips’s analysis, this remarkable makeover was the key factor enabling the Republicans to bring several political forces into alignment. The most critical one, American religious fundamentalism, was part of a wider trend manifesting across North Africa and the Middle East, Eastern Europe, the Indian subcontinent, and Southeast Asia. Between 1960 and 2000, membership to the evangelical Southern Baptist Convention grew from 10 million to 17 million; Pentecostal churches 2 million to 12 million.

Other conservative churches grew accordingly, while Episcopalians dropped from 3.5m to 2m, and the United Methodists from 10m to 8 million. Sectarian and policy divisions were rife within the sector, but the Mayberry Machiavellis’ clever promotion of issues fuelling the culture wars turned out the vote.

Support of the evangelical South and economic conservatives generated just enough votes to effect the restoration of this order via the election of George W. Bush in 2001.

Al Gore won the popular vote, but Brother Jeb in Florida and the Supreme Court sealed the deal that sent him home. “Old Bush loyalists returned to Washington like exiled Stuarts flocking back to the London of Charles II in 1660…” Phillips catalogues the appointments rewarding family allies, and the payback dished out to opponents within the Republican party.

Biblical references dominated George W’s 2001 inauguration speech; compassionate conservatism provided the ideological cover for what in policy terms was the opposite.

And the marginalisation of rural America during his first term did not diminish the 84 per cent of the evangelical vote Bush garnered the second time around. In both elections, the son’s religiosity served to distance him from the father and the family’s Masters of the Universe baggage.

Phillips does not dwell on this issue, even though George I justified Operation Desert Storm as a defence of democracy and, “the emerging new world order.” The new world order, for the evangelicals, is an evil conspiracy to replace national sovereignty with world government.

Its forerunner and proxy is the same United Nations George I so eloquently endorsed after the Gulf War: “It is the sacred principles enshrined in the United Nations’ Charter to which the American people will henceforth pledge their allegiance.”

The author proceeds to describe how the regime’s maladaptive unilateralism and the family’s suppressed scandals revived questions about George II’s legitimacy early in his first term — until Osama bin Laden rescued the drifting government on 9-11.

The collapse of the World Trade Centre Twin Towers was a godsend for the neoconservatives running the show.

THE CRISIS OF TERRORIST attacks on US soil served as the pretext for expanding presidential power and reliance on private security allowed the executive to circumvent the legal checks and balances guiding foreign policy.

George W Bush was even more convinced that Americans were primed for another Iraq war, at least one that succeeded and involved few casualties. The parallels between him and Osama bin Laden are obvious enough before 9-11 and the US response bound both actors to a violent political symbiosis.

Not exactly “creative and uniquely human” exemplars of George H. Bush’s historical process, they do corroborate Václav Havel’s more elegant three-word critique of Marxism, “Consciousness precedes class.” Never before have two battling elephants trampled the grass on such a global scale.

Title: American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of BushAuthor: Kevin Phillips,Publisher: Penguin, New York Year: 2004